Auckland, 25 March 2015 – Younger and older shoppers have surprisingly different views when it comes to bricks and mortar versus online shopping, according to CBRE’s newly-released New Zealand Consumer Survey 2015 Report.
The survey focuses on how people like to shop and the factors that influence consumers’ current and future decisions in the type of environment, mode of transport and amenities of the shopping destination decision.
CBRE Research undertook a survey of 11,000 consumers in 11 major countries across Asia Pacific region. This report focuses on the New Zealand segment of those surveyed and the local influences that affect our consumer shopping decisions, shining a spotlight on whether consumers expect to spend more in shops or online.
The main trends that emerged from the report included:
43% of younger shoppers (18-24) expect to increase their online expenditure
However, 24% of this age group also intend to spend more in bricks and mortar shops over the next two years.
This contrasts with older age groups surveyed, in which much smaller percentages of respondents signaled an intention to spend more in physical shops, with some age groups expecting to spend less in shops than they do now.
This follows recent reports that shoppers in New Zealand could soon be paying GST on more purchases online, and that Revenue Minister Todd McClay has reportedly asked officials to look at the measures other countries are taking to collect GST-type taxes. In addition, a recent Harris poll of shoppers in America revealed that a trend known as ‘reverse showrooming’, through which shoppers view items online and then go to a bricks and mortar shop to buy it, is practised by more people than those who try the item on in a shop and then buy it online.
Grant Unsworth, National Director for Retail Services at CBRE New Zealand, says the current and expected future shopping habits highlighted in the report will be encouraging for bricks and mortar retailers and owners of retail property.
“Online retailing is a well-known trend. However, what our survey illustrates is the ongoing relevance of bricks and mortar, particularly among lower income brackets and those aged 18-34."
“As expected, the survey showed large proportions of respondents indicating they intend to spend more online in the next two years. This was even true for the 55-64 age bracket, with a net 19 per cent expecting to spend more online.
“However, what is surprising is the positive sentiment shown towards bricks and mortar shopping among the younger age groups. While a large proportion of younger people expect to spend more online, in net terms nearly a quarter of respondents in the 18-24 age bracket expected to spend more than they currently do in physical shops.
“The survey highlights the importance of physical retailers understanding the concept of ‘place-making’, which is emerging in retailing in the face of the threat posed by online shopping. Shopping centres now must be an attractive place to meet and gather – providing an important social role in the community, which is something online shopping can never compete with.”
Zoltan Moricz, Head of Research for CBRE NZ, says shopping centres must also continue to improve and offer shoppers convenience, plenty of parking, an attractive environment and other compelling reasons to visit.
“The implications for retailers and shopping centre owners are wide-ranging. For instance, given the importance of parking revealed in the survey, centre owners need to carefully explore their options in balancing highest and best land uses with an enhanced and stress-free customer experience.”
Retailers and centres that adopt dual ‘bricks and clicks’ strategies will also be well-placed, he says.
“Consumers’ ongoing fondness for online shopping means centres could adapt and implement technology-based innovations to continue to capture customers. These could include the development of shopping centre apps and using online networks on social media platforms to enhance engagement with shoppers.”
Other interesting highlights of the report included:
New Zealanders shop less in large shopping centres and more at traditional main street locations and smaller shopping centres compared to many other Asia Pacific countries, including Australia. “If you compare New Zealand and Australia, which have similar cultural values and comparable proportions living in urban areas, the shopping destination preference is somewhat different,” says Unsworth.
The other compelling difference between New Zealand and other Asia Pacific regions is the main method of travelling to where they shop most often. Overwhelmingly New Zealanders utilise their car, with 85% as compared to 8% in Hong Kong. Unsurprisingly this correlates to the high degree of importance being placed on the provision of car parking by consumers when deciding to go shopping.
New Zealanders also place less importance on shopping centres providing leisure activities and events than consumers in Asia and Australia.